Where Have All the Entrepreneurs Gone in Japan?
miter.mit.edu
miter.mit.edu
One issue is that most successful startups in the past two decades have been related to computer software, while Japan's strength has rather been electronic appliances.
Perhaps Japan needs to find a path of entrepreneurship that actually appeals to Japanese in their 20s and 30s, rather than desperately try to copy the valley? My interpretation of Japanese history is that the country is very resistant to change, but when it does change, it can happen very quickly and in surprising ways.
Personally I wouldn't touch iPhone development with a ten-foot pole, but there is an entire floor at my local technology incubator related to it, and my town has several iPhone millionaires.
This is one of the "overnight success in ten years" stories: my town has had a technology incubator (previous employer of mine) and an artsy-fartsy "MIT Media Lab"-type academic institution which, for the last decade, has soaked up government subsidies and produced a lot of quirky tortured, brooding artists' takes on the intersection of music and technology. Fast forward to a wee bit ago: it turns out that tortured brooding artists who sweat music and visual design are Kinda Popular Among iPhone Owners. Success breeds success, too -- the technology incubator jumped on the gravy train and there are coffees held every week where folks come to talk iPhone shop.
Now if only we can get them to start doing B2C/B2SB SaaS...
Mobile development doesn't play to my skill set as a programmer, but that is easy enough to fix. (One copy of Objective C for Dummies, please.) The graphical design I'd have to contract out. The (limited, to my understanding) ability to extract usage metrics from iPhone apps and multi-week wait time between re-releases effectively neutralizes my main strength (testing and iteration) and the app store's discovery mechanism neutralizes the marketing channel I understand best (search and search ads).
And the big killer is that the hit- and fad-focused sales lists mean that if I don't hit a homerun immediately at launch I'm probably going to end up taking a bath on the development costs. I sold $25 of my software my first month and sell ~$4,000 a month now. That is a rare trajectory for iPhone apps: typically, they get released at whatever and then start immediately declining.
However, measuring conversions from marketing campaigns is still brutal, when it's possible at all - it's very difficult to buy installs profitably at volume. And the 'big killer' statement is largely accurate, although I've seen higher-priced niche applications grow more like your business did.
Since computers are becoming more appliance-like, Japan's fortunes may well be on the rise again.
In a "software-appliance" world, attention to detail across the whole user experience will rule the day. A lot of Japan's companies have this in their DNA. Most American companies get it at most 95% right and leave the rest up to the "smart and motivated user."
Perhaps a part of the reason for the App Store's success, is that it promotes the model of "Application as Appliance?"
This piece of advise is good for almost anyone. The valley has a great business model that works there, but it may not work in your neck of the woods.
Starbucks evolved from a small chain of cafes to a huge one by consistently introducing new products, constantly pushing the envelope. Right? So what the hell? [Chokokuro Cafe] just immediately changed their name to reflect the name of the first product that brought them moderate success.
A Japanese friend who works in marketing told me this is the "Japanese resolve." A company sees its fate and resigns itself to it. I think it sounds more like someone just giving up and settling for what they have.
When you are unable to rent anything other than the oldest (most undesirable) places without corporate approval, you are not likely to start your own business.
When all business deals are done in the most expensive part of the country, you and your sales staff are not likely to have experience dealing with problems that average people are going to deal with.
"For a nation that once boasted the likes of Sony, Toyota and Mitsubishi as its entrepreneurial heralds"
Well that's problem number 1, founding years: 1946, 1926/1937, and 1870.
When you have a network like the Bay Area, this will encourage, enthusiast new young students to become entrepreneurs and start their venture. If they are successful the money and funding will come.
1) I'm fortunate to be in an industry where I can get by with zero employees, which is exactly how many educated people in my town would be willing to work for a one-person company that didn't have major corporate backing.
2) I may be forced out of my current apartment after leaving the day job, on the theory that I present unnecessary risk to the landlord of nonpayment of my ($450 a month) rent, since we all know how dangerous small businesses are. (I haven't discussed this with the landlord yet. I think I should be able to finesse this, but I'm a very, very quirky guy by definition because I come from the perspective that this is something that I can negotiate with the landlord rather than a condition he'll impose that I'll just have to accept.
Social acceptance doesn't stop at landlords and bank officers, either. For example, take prospective in-laws. You want to marry your daughter off to a nice young salaryman or a post office worker: he'll give her and your grandchildren stability. You don't want to marry your daughter off to an entrepreneur: one bad quarter and your grandkids won't be able to afford cram school!
Without casting any aspersions on the motivations of parents of young ladies I may have dated, suffice it to say that for at least some people "salaryman" is such a good quality it trumps obvious negatives like "he's, ahem, well... he spent a lot of time overseas."
3) Have you noticed how I use the world's most efficient distribution channel, the Internet? Japan lags the US -- by quite a bit -- in the "ads -> web page -> purchase consummated online" space. It looks like America in 1996 in a lot of ways -- I have software engineers at my company ask, in seriousness, "But how do people pay you when they get your software?" "I take credit cards." "PEOPLE TELL YOU THEIR CREDIT CARD NUMBER!?"
Oh, the entire Japanese payments infrastructure is optimized around Big Freaking Enterprises rather than small businesses. You know how painful it is to get a merchant account with no corporate history? Think that "about that painful, cubed" for taking non-cash payments in Japan.
4) I am sharply limited in what I can say of the Japanese government's entrepreneurial promotion activities having once been employed by a sub-branch of them (prefectural technology incubator). Here's a general statement, make of it what you will: the government giveth and the government taketh away.
5) Hypothetically assuming I were Japanese, my resume would read DAMAGED GOODS right now, because I had the brass ring (salaryman employment at a good company) and I let it go. (Foreigners interact a little... quirkily... with a lot of Japanese social norms. This is one of them.)
Let me try putting it in American terms: how attractive would YC be if it were widely known that Google, Microsoft, Amazon, and almost every other company worth working for considered anyone who either a) did not secure employment at graduation or b) has ever left a company as the moral equivalent of a felon?
"I'm sorry, I think you have a misunderstanding. I am not this young Swedish lady."
"Are you related to her? Is she your wife, girlfriend, etc?"
"No."
"Quite the coincidence that two foreigners would end up renting the same apartment back to back."
"We're translators. Her contract is up, I'm replacing her, it is my employer's apartment."
"Oh. So that makes you coworkers?"
"Well, in a manner of speaking."
"You should pay to avoid causing embarrassment for your employer."
This is one of those times when my American brain goes "Oh hellllllllllllllll no" and my Japanese brain goes "Oh effity, you're right, that is what I am expected to do in this situation."
I paid.
If your adult child defaults on a loan, and someone knocks on your door (and there may be an actual physical knock and likely as not the person who is knocking is a yakuza enforcer, even if your adult child was in debt to an arm of a major publicly traded corporation), you pay. If your drunken useless excuse of a son has an automobile accident, you show up to the hospital several times with flowers and once with a discrete envelope with a generous amount of money to convey the depth of your sorrow for the lapse.
Interesting, baffling stuff. Thanks for sharing.